Weston County, Wyoming
In 2015, we drilled the first of three successful wells in this area targeting the Muddy Sandstone formation. As a result of drilling these wells, we have satisfied the right to earn 35,000 net acres, of which approximately 70% will expire over the next three years if no drilling activity is conducted. Based on current results, a sustained improvement in oil prices will be needed to justify allocation of drilling capital to this area compared to our Southern Delaware Basin position. Approximately 4% of our acreage is held by production.
Sublette County, Wyoming
Our wholly-owned subsidiary, Contaro Company (“Contaro”), owns a 37% ownership interest in Exaro Energy III ("Exaro"). As of December 31, 2018, we had invested approximately $46.9 million in Exaro, with no requirement to make any additional equity contributions, as our commitment to invest in Exaro expired on March 31, 2017. We account for Contaro’s ownership in Exaro using the equity method of accounting, and therefore, do not include its share of individual operating results, reserves or production in those reported for our consolidated results.
As of December 31, 2018, Exaro had 648 wells on production over its 5,760 gross acres (1,040 net acres), with a working interest between 2.4% and 32.5%. These wells were producing at a rate of approximately 22 Mmcfe/d, net to Exaro. For the year ended December 31, 2018, the Company recognized a net investment loss of approximately $12.6 million, net of zero tax expense, as a result of its investment in Exaro. As of December 31, 2018, reserves attributable to our investment in Exaro were 26.6 Bcfe.
Exaro Metrics (Net to Contango)
|Proved Reserves @ 12/31/18||
|% Natural Gas||
|Productive Wells (gross)||
|Developed Acreage (gross)||
|2018 Average Net Daily Production||8.1 Mmcfe|
|Key Operated Field(s):|